[lbo-talk] [pen-l] http://neweconomicperspectives.org/2016/05/mankiws-mythical-ten-commandments-theoclassical-economics.html

[Mark Wain]

Money in the U.S. has become plentiful for the past 9 years or so, why inflation is very low (< 2% yearly)? When profit due to automated production becomes higher, labor power spends less working time for wage and more time for surplus value, the value imbedded in commodity becomes less so that its market price which is a reflection of its value over time gets lower. Money likewise loses its value but there is no inflation as the changes of these two values tend to cancel out. As a result, negative inflation or deflation is possible.

 

Mankiw’s 9th of the 10 commandments:  Prices Rise When the Government Prints Too Much Money is far less plausible. That “when a government creates large quantities of the nation’s money, the value of the money falls. As a result, prices increase, requiring more of the same money to buy goods and services” is likewise not a valid argument.

 

Mark

 

From: pen-l at mail.csuchico.edu [mailto:pen-l at mail.csuchico.edu] On Behalf Of Charles Brown
Sent: Wednesday, May 18, 2016 9:44 AM
To: 'david barkin' via Progressive Economics; marxism-thaxis at lists.riseup.net; lbo-talk at lbo-talk.org
Subject: [pen-l] http://neweconomicperspectives.org/2016/05/mankiws-mythical-ten-commandments-theoclassical-economics.html

 

http://neweconomicperspectives.org/2016/05/mankiws-mythical-ten-commandments-theoclassical-economics.html

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